The Composite Employment Index resumed its downward trend for the seventh consecutive month, according to the Central Bank of Nigeria’s (CBN) most recent Purchasing Managers’ Index (PMI) report for July 2024. This indicates that the employment market is still facing issues.
As to the data, the index showed a contraction of 48.7 points, however with a minor improvement from the 48.3 points reported in June 2024.
The report said as follows: “At 48.7 index points, the composite Employment Level indicated contraction in July 2024 for the seventh consecutive month. The index improved in July 2024 when compared to the 48.3 points recorded in the previous month.”
Employment levels in 18 subsectors fell
The report states that employment decreased in eighteen subsectors, the largest of which was in the Printing & Related Support Activities subsector.
In the meantime, employment levels in the Primary Metal subsector did not vary. On the other hand, employment increased in 17 subsectors; the subsector with the highest employment levels was Petroleum & Coal Products.
The report mentioned: “Eighteen subsectors reported a contraction in Employment, with Printing & Related Support Activities recording the highest decline in the review month. Primary Metal subsector remained unchanged, while the remaining 17 subsectors reported increased Employment Levels with Petroleum & Coal Products subsector having the higher Employment Level.”
The ongoing decline in employment levels underscores the ongoing challenges businesses confront in retaining or growing their workforces in a difficult economic climate.
The index’s little increase points to a gradual rebound, but the overall trend emphasizes the necessity of focused economic policies to boost job growth and assist the sectors of the economy that are most affected by labor shortages.
Employment levels decline in vital sectors
The employment index of the PMI, which gauges the state of the manufacturing, services, and agricultural sectors’ economies, showed a minor improvement. Still, the number points to a decline in employment across all sectors.
The report emphasizes that although there has been a slight rise in overall economic activity, employment levels have not kept up. The industrial sector experienced the greatest dip, with the employment index falling to 47.0 points. This indicates a consistent decrease in worker levels in multiple subsectors, such as Printing & Related Support Activities and Primary Metal.
Within the services industry, employment stayed unchanged at 50.0 points, with certain subsectors reporting increases in employment and others reporting decreases.
The employment levels in the agricultural sector also continued to shrink, as seen by the index, which stood at 47.8 points. The subsectors of Fishing/Fish Farming and Livestock witnessed the worst declines in employment.
What to note
Nigeria’s unemployment rate increased to 5.0% in the third quarter of 2023 from 4.2% in the previous quarter, according to the National Bureau of Statistics’ (NBS) most recent unemployment report. This further highlights the country’s larger employment issues. The unemployment rate in urban regions is higher than that in rural areas (4.0%), at 6.0%. Nigeria’s labour force participation rate decreased from 80.4% in Q2 2023 to 79.5% in Q3 2023. The participation percentage for men was 80.9%, whereas the figure for women was 78.2%.
As previously reported by The News Chronicles, the CBN’s PMI survey for July shows that economic activity is still contracting, which is the 13th straight month of decline since June 2023. The PMI for the month was 49.7 points, according to the report, which indicated a decline in economic activity for the month but an increase above June’s reading of 48.8 points.
Based on responses regarding the direction of change in several business activity parameters, the PMI is computed. A contraction in business operations is indicated by an index below 50.0 points, whilst an expansion is signaled by an index over 50.0 points. A 50.0 point index indicates that there has been no change in company activity.
According to the research, the month’s PMI increased due to an increase in output level, suppliers’ delivery times, and inventory stock, but employment and new orders decreased during that time.
